Hello everyone, Dimitri from Gracious Interests here.
Today we will be talking on the aspect of “mining” when talking bitcoin.

Now, in previous videos I mentioned that mining is letting your computer “guess” the “hash”, which is the serial number of a block in the blockchain. And that if it correctly guesses the hash, you will be rewarded with coins.

That was a very abbreviated and incomplete explanation.

Mining is a bit more complex and I will try to explain it as simple as possible.
Mining actually encompasses the process of adding transaction records to Bitcoin’s public ledger of past transactions. This ledger of past transactions is called the block chain as it is a chain of blocks.
The blockchain serves to confirm transactions to the rest of the network as having taken place. Individual blocks must contain a proof of work to be considered valid.

This is where the guessing of the HASH (or serial-number) comes in to play.

This proof of work is verified by other Bitcoin nodes each time they receive a block. The primary purpose of mining is to set the history of transactions in a way that is computationally impractical to modify by any one entity. By downloading and verifying the blockchain, bitcoin nodes are able to reach consensus about the ordering of events in bitcoin.

All of this is called “mining bitcoin”.

I will try to reword it in plain English.

Mining is the process of adding and validating transaction records to Bitcoins public ledger. In order to validate, the correct hash (or serial number) needs to be guessed. As soon as the hash has been guessed correctly will other nodes (other bitcoin miners) on the network need to validate and confirm the hash (or transactions) serial number is indeed correct. 51% of all miners must validate the guessed hash in order for it to be considered valid before any Bitcoins are paid out to the miner or mining pool.

I hope this video cleared up a few things and I hope to see you all soon.

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If you want to learn more about Cryptocurrency check out my guide.
– “The Ultimate Guide To Cryptocurrency” https://gum.co/UltimateCryptoGuide

I also update my personal blog with Cryptocurrency related questions.

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